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Gig-work Platform EPWK Tests Investment Crowds With Upsized IPO Plan

Key Takeaways:

EPWK, which helps small and medium-sized companies find gig workers, has raised its IPO fundraising target by about a third from its original plan in February 2023

While demand for crowdsourcing platform services has recovered from a pandemic downturn, China’s slowing economy has eroded the company’s margins

By Edith Terry

When EPWK Holdings Inc. (NASDAQ: EPWK) first filed for a New York IPO in February last year, it was part of a flurry of smaller Chinese companies making such applications after China’s securities regulator clarified they could proceed. The crowdsourcing specialist’s plan was modest, seeking to raise up to $12 million by selling 1.5 million shares at between $7 and $8 each.

Fast forward a year and a half, when the company has upped the ante by nearly doubling its shares on offer to 2.75 million, according to its updated prospectus filed last week. But it will sell those shares at a lower price range of $4 to $6. That means it could raise up to $16.5 million, up by about a third from its original goal, in a relatively unusual move in a market where downsizings have been more the norm over the last year or two.

A pricing at the middle of its range would value the company at about $110 million.

The upsized plan could reflect changing times over the last month and a half, as U.S.-listed China stocks have rallied on growing signs that Beijing will take more decisive action to jumpstart the nation’s slowing economy. EPWK appears to believe it can crowdsource more investor dollars on Wall Street in the current climate, the same way it helps its small and medium-sized enterprise (SME) clients crowdsource freelancers for gig jobs in China.

The company pitches itself as a one-stop service for enterprises, with 300 tasks in seven industry categories, from logo and website design to software development and business services. It has four revenue streams: premium business solutions, which accounted for 69% of revenue in its latest fiscal year through June; online promotions, mainly for freelancers, generating 18% of revenue in that period; value-added services, at 7% of revenue; and shared office ...